Earnings call transcript Q1 2023

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Operator

Good afternoon. Thank you for standing by. Welcome to Westlake Chemical Partners' First Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded today, May 4, 2023. I would now like to turn the call over to today's host, Jeff Holy, Westlake Chemical Partners' Vice President and Treasurer. begin. may you Sir,

Jeff Holy

our afternoon, Quarter welcome joined XXXX our our Steve Albert Good and and Chemical members other today the Partners' Chao, of Bender, CEO; and First Conference team. President Vice everyone, you. President to CFO; and management Westlake by Executive Thank Call. I'm

Westlake Westlake a to references parent our company, of Corporation; and we During Westlake the owns or to this refer Partnership, call, LP, the certain refer Partners OpCo Chemical refer Westlake and olefins to to as subsidiary ourselves Partnership. OpCo References to which Westlake assets.

we distributable are flow. refer Definitions Additionally, on we when cash Chemical terms these website. to available are Westlake referring to of distributable the flow, MLP Partners' Partnership's cash

more that based you our made management. regulatory subject that are will to differ Investor in website. contain the is or management available statements risks are information learn results suggest cautionary actual lead Today, forward-looking by or factors predictions on as and assumptions beliefs encourage Relations reviewing expectations to topics filings, is uncertainties. to as could by well and our that available about forward-looking statements to currently thus our on going to also These certain We which management's information the discuss

time that Please can available hours A This the be wlkpartners.com. available you call. after conference be broadcast may only this call our as our in webcast as at is finally system this And accessed release an today's operating X, web the morning, today, X live of page first of of be replay Release web press website. This accessed accurate wlkpartners.com. of time-sensitive no of call can information Westlake page of results. any Press the Partners that with this call replay. the is quarter document would beginning Partnership's that that via details issued through advise XXXX. advised a I Internet That of and note XXXX information you financial replay our reported are conclusion May on will at longer be speaks on therefore, being section

Chao. Now the I to Albert would to call Albert? over turn like

Albert Chao

all afternoon, Thank discuss joining quarter morning's everyone, press for of net per with income quarter of us or ethylene OpCo when results. benefited from the $XX Good we of Partners' XXXX $X.XX OpCo operating thank to In unit. which, third-party Jeff. strong first XXXX our across income, first for net ethylene and you including release, improving first the reported million performance consolidated drove million Westlake $XX margins, paired you, units XXXX. in first quarter quarter our sales this of

consistently stability production volatility minimizes is stability our The degree of and other distributions Westlake history our of agreement, the of reliable through high business, The and model us demonstrated predictability sales enabled market when deliver long Partners' coverage. which the of cash ethylene in to flow, has margin fixed with business risks. paired

our distribution is of any in July without XXth distribution quarter's This XXXX quarter since reductions. the consecutive IPO

and turn to for the to Steve over the like now more call on detail operating would I financial to quarter. Steve? provide the results

Steve Bender

per on $XX Albert, OpCo's earnings, press had Westlake million. of of including XXXX $XX $XXX income, good consolidated distributable $X.XX $XX morning's $X.XX The reported Partners' you, net sales this for million afternoon, quarter Consolidated unit. or first income we In Partnership net unit. Thank million release, flow net and quarter per cash of was the everyone. million or

of to of that production $XX partnership first more levels $XX for million. the income of net higher $XX net quarter XXXX XXXX, million $X by million quarter quarter Westlake XXXX Partnership Partners decreased compared benefited first were Compared the First to from lower income first million due million third-party higher $X $XX distributable by expense quarter of decreased offset million flow expense. compared to flow XXXX modestly interest XXXX first of and for cash to margins. the quarter cash higher than interest ethylene by Distributable

end strong million, million and our to cash $XX first quarter of with the balance Turning flows. the with at first Long-term $XXX spent balance cash leverage debt quarter of at investment on approximately consolidated leverage the end ratio a Westlake maintained of and the which agreement quarter, the of remaining OpCo capital Xx. At Partnership In was $XXX expenditures. million $XXX attention and we consolidated $XX the invested XXXX, the sheet was management at through of million We OpCo. was cash our our million. the totaling metrics

XX, a On in Partnership's May XXXX, XXXX. IPO consecutive XXXX. is XXXX, consistency to XX per the quarterly original we to XX, cash May $X.XXX of our and first flows. beneficial made has predictable record paid the of cash unitholders, first by be grown the our today's The distributions since to of and respect will per to with XXXX, The quarterly environment unit the of unit. unitholders May economic quarter have Partnership's differentiated fee-based our flow on announced Since continues Partnership of we minimum and our prove $X.XXXX X, distribution distributions Partnership's quarterly of in distribution XX% distribution earnings quarter

we July Partnership's ratio and in maintained since in of cumulative in back, stability coverage the have flows. a cash Looking X.Xx excess our of IPO distribution XXXX,

to the our able access current markets. been capital have distribution without the We to sustain need

the have XX coverage the has planned week our is we the and a turnaround, years, fully City, been one, before has similar their a And prior as for of reserved the this is expect turnaround. in we In a this we Westlake facility For and we where And and period amount turnaround this funded began turnaround ratio commenced for such impacted XXXX. included at for planned of turnaround as Calvert to modeling for was recovering. would only a charge time result. our to Kentucky purposes, been last expected planned days. turnaround This this reminder, cost as distribution

Albert the Albert? turn comments. to to over to like back closing some make I'd call Now

Albert Chao

Thank you, Steve.

the continue are and with market end-use about rest for by performance derivatives the through the demand the needs consumer We steady Partnership's improving our should driven in this optimistic We pleased operational of downstream year. Westlake, products packaging. and the in parent, demand believe quarter. We fundamentals ethylene first remain performance financial by that and

Our through ethylene and sales downs structure for cash a stable Westlake cash fee-based will as OpCo's deliver production continue to predictable flow well ups from agreement as which take-or-pay predictable and unplanned provides with flows economic and turnarounds. contract planned XX% our of

financial a metrics. strong leverage a we Turning -- strong sheet to balance We capital our maintain balance main with structure. conservative sheet and

market organic our opportunities ownership our higher including sales fixed our via of interest agreement of levers evaluate opportunities, margin growth as expansions to other ethylene with continue Westlake. facilities; acquisitions a negotiations in the navigate conditions, OpCo; X qualified we current future, ethylene such streams; growth of we'll of in of income As increases of and

to We long-term on our value provide focused remain continue to our ability to unitholders. and distributions

continue to along will stewards work we good where safe on being of efforts. we broader part environment always, with operations and sustainability the focus of as As our live

quarter for call. our Thank first to listening you very much earnings

the Jeff. turn back Now to I'll over call

Jeff Holy

you, Thank Albert.

call teleconference like Before of that taking will the has remind replay to hours ended. would we after questions, you be this begin available X I a

end that number We call. the the again will at provide of

Operator

Instructions] [Operator

we And have now TPH. Matthew Blair with

Matthew Blair

There feeling wanted check do structure. the simplify parents overall about corporate for another an MLP. today, Steve. would roll-up I in and the costs it good you're Hey, see from how Albert said like the to reduce to the value proposition offer was MLP and things and morning,

drop potential coming the Westlake about how in still from future that that are a confident years, or mind are X in keeping value X been you a feeling hasn't or there's So so And increase just here? distribution LP? you there

Steve Bender

is good several trades multiple at Partnership Corporation. Westlake as with a still that Matthew, the drop-down So and to remains done right certainly drop-down to do between can the of question. and that a noted, Corporation it an get transaction We Corporation a premium the years, attractive you because we right at of in that a transaction a Westlake challenge and to value. with And to if kind that to fund arbitrage the capital. of kind valuation strong we haven't And a that it Westlake Partnership the and maintain Partnership view attractive it's find still

where continue that in look interest So show and arise. opportunities might to that for we

Matthew Blair

Okay.

good. you said planned in Sounds that. so impacted. Are in sort wanted And the of of that I QX, instead but turnaround just then terms it's Calvert on City coverage check a of in impact turnaround buyer's fee? distribution would unplanned don't be like because expecting would any to think you downtime, deficiency the you

Steve Bender

right. do a this as That's have turnaround. planned We

shortfall. would not have any expectation deficiency the we so fee And is or buyer

built year were seen would we we've once normally the previous expect as expect coverage mind. this occur recovery the in pound XXXX planned dip targeted all all be and execute that as the So below will all we of into we've And outage the coverage our turnarounds behavior in of target we into will to fully fully production have both as those complete the lost normal that back ratio our see to set. would But ratio. turnarounds we traditionally and we we because X.X That's turnarounds, I is the that coverage case, that the complete that forecast. turnaround,

Operator

Jeff call back time, turn session the Q&A the now I has At ended. this will to now over Holy.

Jeff Holy

us again second for you our Thank next today's call. for in XXXX join our you. conference call hope quarter discuss you'll We results. Thank to participating

Operator

participating Quarter Thank Earnings XXXX Conference Partners' you Call. First today's Chemical for in Westlake

be call Partnership Eastern reminder, XX:XX a replay and two for Goodbye. available after the accessed hours ended As on Thursday, has XXXX. this call can accessed be replay May beginning may be until via Time XX, the website. The will

Westlake Chemical Partners (WLKP) 4 May 232023 Q1 Earnings call transcript